Beware of Bonds

Bond prices typically move in the opposite direction of stock prices. Long-term bonds have more volatile total returns than short-term bonds. Bonds can go down in value, particularly if purchased at a premium. With current money market yields near 5%, their seems little reason to invest in bonds or bond funds that can go down in value and yield less. If you do invest in bonds in a non-taxable account. long-term treasuries offer the greatest potential for price appreciation when and if interest rates come down. In a taxable account, municipal bonds offer higher yields than tax-free money market funds, but not by much.